|
The report headed by Suresh Tendulkar, former chairman of PM’s Economic Advisory Council states that the rural poverty ratio has been understated by earlier estimates and the new methodology has led to a significant revision in the earlier Planning Commission rural poverty estimate of 28 % in 2004-05, to 42% for the same year.
|
As much as 42 per cent of the rural population survives with monthly per capita consumption expenditure of Rs. 447, in other words they spend only Rs. 447 on essential necessities like food, fuel, light, clothing and footwear says a report in Dec 09 by the expert group.
|
As per 2004-05 prices, a person spending was less than Rs 19 in urban areas and Rs 15 in rural areas would now be called poor. The current poverty line is a per capita expenditure of Rs 12 per day. The number of poor in 2004-05 is put at 408 million where as the older method, based on calorie intake, put the number at 302 million.
|
Most of the small farmers fall under this category.
|
“The smallholder farmers are the heart and soul of food security and poverty reduction,” Mr. Ban, UN SG declared at UN food summit-16 Nov 2009
|
“Unless you look at the majority of farmers who have small landholdings and who produce most of the food, how can you achieve national development? Does it not make sense to invest in them?” IFAD-FE021209
|
This is reflecting the inescapable point that economic reforms have bypassed the vast majority of rural India.
|
| Among the urban population, 25.7 per cent are poor, spending Rs. 578 on essential needs. |
The National Commission for Enterprises in the Unorganised survey indicate that 77 per cent of the population were living with a per capita consumption of up to Rs 20 per day.
|
| However, the Economic Survey 2008-09 based upon the calculation of household consumption indicated that per capita consumption expenditure of 60.5 per cent of population was less than Rs 20 per day. |
Regional Disparities
|
Final Poverty Lines and Poverty Head Count Ratio for 2004-05-
|
| State |
Poverty |
Headcount |
Ratio (%) |
| |
Rural |
Urban |
Total |
| Orissa |
61 |
38 |
57 |
| Bihar |
56 |
44 |
54 |
Chattisgargh
M P |
55
54 |
28
35 |
49
49 |
| Jharkhand |
52 |
24 |
45 |
| Maharastra |
48 |
26 |
38 |
| U P |
43 |
34 |
41 |
| W B |
38 |
24 |
34 |
| T N |
38 |
20 |
29 |
| Karnataka |
38 |
26 |
33 |
| Gujarat |
39 |
20 |
32 |
| Assam |
36 |
22 |
34 |
| Rajasthan |
36 |
30 |
34 |
| A P |
32 |
23 |
30 |
| Uttaranchal |
35 |
26 |
33 |
| Haryana |
25 |
22 |
24 |
| Punjab |
22 |
19 |
21 |
| Kerala |
20 |
18 |
20 |
| J&K |
14 |
10 |
13 |
| Delhi |
16 |
13 |
13 |
| All India |
42 (28%) |
26 (27%) |
37 (28%) |
|
(Rounded off to the nearest unit)
Figures in brackets -estimates of Planning Commission
|
Note: Expert Group took into consideration minimum education and health needs in addition to minimum calorie needs. The new method takes the present all-India urban poverty line as the basis for every other poverty line.
|
| Source: Expert Group headed by Tendulkar, Nov 2009 |
| The worst hit State remains Orissa, whose rural poverty is 61 per cent, and aggregate percentage of poverty is 57 per cent, earning the dismal distinction of being the number one State at an all-India level for being home to the highest percentage of people below the poverty line. |
| The distressing aspect to the rural scenario continues to be the parlous state of affairs in Bihar, Madhya Pradesh, and Uttar Pradesh where rural poverty is at its worst at 56 per cent, 54 per cent and 43 per cent respectively. Ironically, in the so called well developed state Maharashtra, rural poverty is as high as 48%. Out of the total credit, rural credit is in this state is a mere pittance of 2 % and Credit given in Metro areas is as high as 90 %. No wonder the rural population is languishing. Rajasthan, known as a state with desert, has better poverty ratio than Maharashtra, at 36%. |
| As usual, Kerala, Punjab and Haryana have the lowest poverty ratios around 20%. |
| Five-fold increase in Inter-State Income Disparities |
| In 1980-81, the per-capita state domestic product (SDP) in the richest state, Punjab, was about three times that of the poorest, Bihar. In 2006-07, this difference increased to almost five times, with per-capita SDP of Haryana, the richest state, at Rs 48,214 against Bihar’s — still the poorest! — at Rs 10,286. |
Ironically, poorer states are also those with abundant natural resources, including minerals. Part of the reason is the out-dated and unfair royalty system that gave the benefit of the rich mineral resources to the Centre, even as states had to spend on related social and physical infrastructure. Hopefully, the new revised royalty rates will address some of this imbalance. |
| Nonetheless, the net effect is wide disparity in the provision of public services. Per-capita spending on development expenditure has a significant and positive correlation with per-capita SGDP rather than with higher tax effort of the richer states, implying that the funds transfer system has not succeeded in offsetting fiscal disabilities that led to high inter-state disparities in development expenditure in the first place. Public Finance & Policy (NIPFP), ET 311209 |
| Counter Point : |
| 1. Surjit Bhalla has pointed out, that the expenditure data provided by the National Sample Survey (NSS) captures less and less of India’s expenditure with each passing year. In 1960, according to Bhalla, the all-India expenditure estimate given by the NSS was around 87 per cent of the expenditure that the National Accounts or the GDP data told us was taking place in the country. |
| By 2004-05, this was down to just 48 per cent — in other words, the NSS data, which the government/World Bank/ Tendulkar used, reflects less than half the total consumption in the country! Given this, these exercises will always indicate that India has more poor people than is really the case — Bhalla estimates that, using the pre-Tendulkar expenditure poverty line, just 11 per cent of Indians are below poverty line. It’s unlikely the figure will rise to more than 15-16 per cent, a far cry from Tendulkar’s 37.2 per cent. |
| 2. The National Council of Applied Economic Research’s (NCAER’s) annual household survey of income is another useful tool to measure the Tendulkar estimates by, and this also reinforces the view that Tendulkar’s poverty numbers are way too high. According to NCAER 2004-05, 30.5 per cent of Indians — 35 per cent in rural India and 19 per cent in urban India — are “poor”, based on Tendulkar’s expenditure poverty line. |
WHAT THE COUNTRY’S POOR OWN
(% households with these products) |
| |
Refrigerators |
Colour TVs |
2-wheelers |
Ceiling
fans |
Pressure
cookers |
| Rural areas |
0.8 |
5.4 |
7.5 |
23.4 |
16.7 |
| Urban areas |
9.3 |
25.3 |
21.3 |
70.7 |
50.8 |
Note: The Tendulkar poverty line expenditure has been applied to the NCAER dataset
Source: NCAER, Nishie Survey, 2004-05 |
|
| While this is significantly lower than the 37.2 per cent figure put out by Tendulkar, even more important is what these people own. Around one in 13 households in this group of people in rural areas own a two-wheeler — the figure rises to one in five in urban areas. This means these households earn enough to afford to buy petrol to use these vehicles. One in four owns a ceiling fan in rural areas and seven in 10 own the same in urban areas; one in 20 in rural India owns a colour TV and the figure is one in 4 in urban India (the figure for black and white TVs is many times this) — which means they live in houses that have electricity. In other words, this knocks a serious hole in the view that these are households below the poverty line. Sunil Jain: How rich are India's poor? 211209 |
| KRSR/Article- 01/010110 |
